Want to leave job and start business? Starting business is a dream so many have. But starting and running a business succeessfully is not for everyone. So if you think, you have it in you, and you want to start your business, then this post is for you.
Getting Stuck!! Whether starting a business is for your or not? This is a familiar domain for me. I tried starting my business in 2013, thereafter in 2016 and finally started my company in 2019. And let me tell you, it was a tough call but a right decision.
So if you want to know what does it takes to start your business, then let me tell you about 20 things that you must do before you leave your job to start your business.
Phase 1: Prepare To Leave Your Job
Not so long ago, I started my first business. Then had multiple bulb-on moments and I started my 2nd and subsequently 3rd venture as well. But that first step was most crucial.
Why have a business?
Most elementary and basic question that must be answered in the beginning itself.
Why do you want to start a business? Is it an idea that is motivating you? Is it the market opportunity that must not ignored? Is it peer pressure (trust me this is happening a lot!!). Whatever may be the reason. Your clarity is absolute must.
Do you want to be a full time business owner?
Why do you want to leave job? Decide if leaving job is absolutely must. If you can have a business starting as a side hustle, it will give you financial stability and peace of mind.
Top 3 misconceptions why people think about leaving job to start business are as follows:
- Job Work is no fun
- Lack of work life balance
- Too much work pressure
In these 3 cases answer is not to start business but change your job. Trust me when you start your business these 3 factors will be part and parcel of your business life for a long time.
Also recently, one of my client highlighted that he wanted to be his own boss and that is why he left job and started his business. Unfortunately, due to his business model he simply swapped 1 boss for 30 bossy clients – if you can understand this 😉
Salary Vs Profits
Translate your job-based earning to business-based earning when you start business.
For example, Mr. A is evaluating potential business earnings. So, let’s check out the maths.
Let say Mr. A’s net salary (= in hand salary post tax deduction) is Rs 1 lac per month.
So, in terms of business this is his retention post Income taxes. Which means his earnings before Income taxes should be around Rs 1.43 lacs.
If his business expenses are Rs 1 Lac, then his gross profits are Rs 2.43 lacs. Considering 30% gross margin his sales should be around Rs 10.5Lacs.
Can Mr. A do this much sales?
Evaluate sustenance requirement.
Let me be clear!!
Once you start business, how soon will it generate profit?
Also, will profits be large enough to facilitate monthly sustenance + redeployment in business?
Considering both these scenarios, evaluate how much back up is needed. In other words, how long can you continue without any profits from your business?
Evaluate Your Training Requirements.
Running a business requires you to have knowledge on multiple fronts.
Create a list – Map if you need to learn the skill or you can hire someone or outsource the function.
Even then you need to train yourself on things like lead generation, traffic generation, business process, business planning etc.
Ideally complete all necessary training and new skills while you are in the job.
Now it is time for you to decide by when you want to start you business. Set deadlines, work backword on the requirements and timelines and gear up for action.
Also do consider your job notice period while making the plan. Ideally serve your entire notice period but if you can get garden leave (where you cannot join any other company but are on leave with pay for term of your notice), it will help a lot while preparing for the transition.
Phase 2: Background Work To Start Business
These are crucial questions for business planning. So do research, write down things again and again. Ideally this preparation should be complete before you exit your job. So use the time of your notice period wisely.
What problem are you going to solve?
Generating sales is all about solving customer problems, whether these are current problems or the problems that they will face in future.
Create description of customer’s problem – from customer’s perspective. What value will customer get by solving this problem. If you are not clear, make sure you carry out small research to get clarity. This process in requires lot of effort.
Let me give you few bullet pointers:
Find the problem that customer wants solution for.
Analyse the problem: Get idea of frequency of problem, how big is problem, what methods customers are using currently to solve it? Most important what is root cause of problem. How vast is impact of the problem? How many functions / departments are getting affected?
What is decision criteria?: What will be considered as solution? What criteria will be deployed to evaluate or judge it?
Develop scenarios based solutions: One solution is bare basic requirement. Create multiple scenarios and solutions.
Which solution is most optimal?: Basis the decision criteria, which is the most optimal solution. How can you deliver it? What are possible contingencies?
Who will buy from you?
This is all about finding target customer. Whether your offering is B2B or B2C. You can use segmentation approach to create customer persona or company persona.
This is one of the most important steps as your answer to this question will have impact on your business model, marketing as well as strategy. Also estimate potential number of customers in the universe as this is representative of size of the market.
Why would customer buy from you?
Here you need to think about your USP how you are different from others as well as what can you offer that for the customer is irresistible. Typically it can be one or more pointers from any of these reasons
- Value that you are giving in terms of price and offer
- You experience or influence or trustworthiness
- Quality is superior
- You are successful in defining need of the customer as well as communicating it
- You are the only player offering this solution
What price will customer pay?
I am not talking about Pricing strategy which is subject for another time. To start with you need to estimate how much will your customer pay for solution to their problem.
My suggestion is to use a 2X2 matrix to define you product / solution. Take solution impact on one axis. Take solution implementation complexity on another axis. In this manner nature of the solution itself should give you some idea.
In case you are not getting anywhere, do google research to map few prices of product / services available from competition. This is ballpark number for estimation and not the final pricing.
Define your product or service.
Create clarity regarding what you are going to sell in the Market. Is it product or Service? What will be its structure? Specifications, features, how will you package it?
Are there any specific requirements for its manufacturing, storage, delivery, or usage? How much price you will charge for it. Also make sure you define your stack or like people call it upsell.
How will you found your customers? How will you make them aware of your product / service.
It largely depends on your TG. This is where traffic generation / lead generation comes into perspective. This part also has impact on your business model. Typically, you can use following methods to find your customers:
- Social Media/ Platform Connects
- Collaboration / Alliance
It is time to understand importance of customer acquisition plan at this stage. I recommend Sales funnel based approach for finding and making customer aware about your product and services.
Phase 3: Prepare To Start Business
You are nearly there. Its time to take the things next level. This requires utter dedication to roll out your plans and finally launch business that is uniquely yours.
Formalization of company structure as per India Laws.
- Private Limited
- Public Limited Company
Do research on PRO and CONS of each format plus study the compliance requirement.
Proprietorship is the simplest format and you can start straight away. Good idea is to connect with a CA / lawyer to help you with this stage.
Check GST requirement for your business. Typically this is turnover linked but for some business it is mandatory to have GST registration. Connecting with a TAX practitioner will make a lot of sense in this casege.
Whether you are going for funding or not, you will need initial capital to start up and manage the operational activities. Create excel sheets that will capture all your requirements under proper headers.
Business Vision / Mission.
Ideally you should have clear Vision and mission statements. People start without this but I’ll recommend putting your head in and work on these. It will create more clarity as well as are basic requirement for any pitch presentation that you are going to create. Basis business vision create objective, goals as well as critical milestones.
Define your business model.
Your business model is basically revenue model that describes how you are going to earn money. For example you might be a manufacturer and want to have distributors / whole sellers / retailers to reach your end customer. So this is your business model.
You can also have multiple channels focusing on different products / customer segments. This step is critical because you’ll need this cratee your strategy and planning to leverage your business model.
Create Business Plan.
This is a document that will give you clarity on numbers, be it sales, expenses, profitability etc etc. Ideally you should create business plan covering short term (monthly / quarterly/ Half yearly) as well as long term (Annual / 3 years / 5 years) to have maximum clarity.
Further, you business strategy need to be defined. Business strategy is step by step approach how you’ll reach your business targets. Functional strategy like marketing / logistics should also be carried out at this stage without fail.
Branding / Website / Landing Page / Email system.
For a modern entrepreneur or a business owner, these are hygiene elements and cannot be ignored.
Your brand story is required to attract your target customer group.
Website is important element in having digital presence.
Landing Pages are needed as part of your lead generation strategy.
Email systems and autoresponders are required to capture leads and nurture them.
Depending on business model your may need other systems as well like Process Management, Payment Gateways, Workflow Automation, Webinar Systems so on and so forth.
Big Bang Launch 🙂
Fix up business launch date and do work on launch marketing. Depending on your budget and business format you’ll plan the activity or hire an agency.
Eg. Retail stores can have big bang offline launch and vicinity marketing to create buzz.
An ecommerce store can have launch teasers starting 1 month before launch with countdown and behind the curtain peak to engage prospective customer.
Phew, you now understand starting a business is not for everyone. It requires every ounce of commitment and focus to launch a business and then work to make it successful and reach critical milestone.
Your ability to transform yourself to suit business needs will be an underlying factor that will play a major role in the success of your venture. Anyways, if you need my help or are getting stuck at any point, connect with me through contact page.
So this is Mayank Bhargava signing off. Till next time, Stay Happy, Stay healthy, Stay Profitable